##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

|                                              |  |                                                                                         
|--------------------------------------------- |  | ----------------------------------------------------------------------------------------
|[X]                                           |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|                                              |  |                                                                                         
|For the quarterly period ended March 30, 2002
|                                              |  |                                                                                         
|OR                                           
|                                              |  |                                                                                         
|[   ]                                         |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission file number: 1-14189



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Gerber Childrenswear, Inc.
(Exact name of registrant as specified in its charter)



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|                                                                        |  |                                                   
|----------------------------------------------------------------------- |  | --------------------------------------------------
|Delaware
(State or other jurisdiction of
incorporation or organization) |  | 62-1624764
(I.R.S. employer
identification number)



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7005 Pelham Road
Greenville, SC 29615
(Address of principal executive offices)

(864) 987-5200
(Registrants telephone number, including area code)



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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

[ X ] YES                    [   ] NO

As of May 8, 2002, there were outstanding 8,414,660 shares of Common Stock and
11,396,046 shares of Class B Common Stock.





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##### 



Gerber Childrenswear, Inc.
INDEX

PART I  FINANCIAL INFORMATION

|           |  |                                                                  |  |  |      |  |    | 
|---------- |  | ---------------------------------------------------------------- |  |  | ---- |  | -- | 
|Item 1    |  | Financial Statements                                             |  |  |      | 
|           |  |                                                                  |  |  |      |  |    | 
|           |  | Condensed Consolidated Balance Sheets as of March 30, 2002,      |  |  |      | 
|           |  | March 31, 2001 and December 31, 2001                             |  |  | 1    | 
|           |  |                                                                  |  |  |      |  |    | 
|           |  | Condensed Consolidated Statements of Income and Comprehensive    |  |  |      | 
|           |  | Income for the quarters ended March 30, 2002 and March 31, 2001  |  |  | 2    | 
|           |  |                                                                  |  |  |      |  |    | 
|           |  | Condensed Consolidated Statements of Cash Flows for the quarters |  |  |      | 
|           |  | ended March 30, 2002 and March 31, 2001                          |  |  | 3    | 
|           |  |                                                                  |  |  |      |  |    | 
|           |  | Notes to Condensed Consolidated Financial Statements             |  |  | 4-8  | 
|           |  |                                                                  |  |  |      |  |    | 
|Item 2    |  | Management's Discussion and Analysis of Financial Condition and  |  |  |      | 
|           |  | Results of Operations                                            |  |  | 9-13 | 
|           |  |                                                                  |  |  |      |  |    | 
|Item 3    |  | Quantitative and Qualitative Disclosures about Market Risk       |  |  | 13   | 
|           |  |                                                                  |  |  |      |  |    | 
|           |  | PART II  OTHER INFORMATION                                      |  |  |      | 
|           |  |                                                                  |  |  |      |  |    | 
|Item 6    |  | Exhibits and Reports on Form 8-K                                 |  |  | 13   | 
|           |  |                                                                  |  |  |      |  |    | 
|Signatures |  |                                                                  |  |  |      |  | 14 | 





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##### 



PART I  FINANCIAL INFORMATION

ITEM 1  FINANCIAL STATEMENTS

Gerber Childrenswear, Inc.

Condensed Consolidated Balance Sheets


|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |        |         | 
|------------------------------------ | ---------------------------------------------------------- | ----------------------------- | ------- | -------------- | ------- | ----------- | ------- | ------------ | ------- | - | ------- | ------ | ------- | 
|                                     |                                                            |                               |         | (Unaudited)    |         | (Unaudited) |         | (Note)      
|                                     |                                                            |                               |         | March 30,      |         | March 31,   |         | December 31,
|                                     |                                                            |                               |         | 2002           |         | 2001        |         | 2001        
|                                     |                                                            |                               |         |                |         |             |         |             
|                                     |                                                            |                               |         | (In thousands)
|Assets                               |                                                            |                               |         |                |         |             |         |              |         |   |         |       
|Current Assets                       |                                                            |                               |         |                |         |             |         |              |         |   |         |       
|                                     | Cash and cash equivalents                                  |                               | $       | 42,948         |         |             | $       | 34,949       |         |   | $       | 45,556 |        
|                                     | Accounts receivable, net                                   |                               |         | 32,892         |         |             |         | 35,030       |         |   |         | 26,119 |        
|                                     | Inventories                                                |                               |         | 47,889         |         |             |         | 53,627       |         |   |         | 50,625 |        
|                                     | Deferred income taxes                                      |                               |         | 4,968          |         |             |         | 3,141        |         |   |         | 4,490  |        
|                                     | Other                                                      |                               |         | 2,898          |         |             |         | 2,384        |         |   |         | 3,232  |        
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |        |        
|                                     |                                                            | Total current assets          |         |                | 131,595 |             |         |              | 129,131 |   |         |        | 130,022 | 
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |       
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |       
|Property, plant and equipment        |                                                            |                               | 52,974  |                |         |             | 50,651  |              |         |   | 53,974  |       
|                                     | Less accumulated depreciation                              |                               |         | 22,267         |         |             |         | 17,940       |         |   |         | 21,175 |        
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |        |        
|                                     |                                                            |                               | 30,707  |                |         |             | 32,711  |              |         |   | 32,799  |       
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |       
|Other Assets                         |                                                            |                               |         |                |         |             |         |              |         |   |         |       
|                                     | Excess of cost over fair value of net assets acquired,
net |                               |         | 15,560         |         |             |         | 16,342       |         |   |         | 15,662 |        
|                                     | Other                                                      |                               |         | 6,129          |         |             |         | 9,009        |         |   |         | 6,798  |        
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |        |        
|                                     |                                                            | Total other assets            |         |                | 21,689  |             |         |              | 25,351  |   |         |        | 22,460  | 
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |        |        
|                                     |                                                            | $                             | 183,991 |                |         | $           | 187,193 |              |         | $ | 185,281 |       
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |       
|Liabilities and Shareholders Equity |                                                            |                               |         |                |         |             |         |              |         |   |         |       
|Current Liabilities                  |                                                            |                               |         |                |         |             |         |              |         |   |         |       
|                                     | Accounts payable                                           |                               | $       | 7,267          |         |             | $       | 8,642        |         |   | $       | 8,968  |        
|                                     | Accrued expenses                                           |                               |         | 15,621         |         |             |         | 14,492       |         |   |         | 14,845 |        
|                                     | Current portion of long-term debt and capital leases       |                               |         | 676            |         |             |         | 5,358        |         |   |         | 4,327  |        
|                                     | Income tax payable                                         |                               |         | 2,356          |         |             |         | 5,257        |         |   |         | 606    |        
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |        |        
|                                     |                                                            | Total current liabilities     |         |                | 25,920  |             |         |              | 33,749  |   |         |        | 28,746  | 
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |       
|Non-Current Liabilities              |                                                            |                               |         |                |         |             |         |              |         |   |         |       
|                                     | Long-term debt and capital leases, less current portion    |                               |         | 1,287          |         |             |         | 4,150        |         |   |         | 1,553  |        
|                                     | Other non-current liabilities                              |                               |         | 14,408         |         |             |         | 18,595       |         |   |         | 15,736 |        
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |        |        
|                                     |                                                            | Total non-current liabilities |         |                | 15,695  |             |         |              | 22,745  |   |         |        | 17,289  | 
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |       
|Shareholders Equity                 |                                                            |                               | 142,376 |                |         |             | 130,699 |              |         |   | 139,246 |       
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |        |        
|                                     |                                                            | $                             | 183,991 |                |         | $           | 187,193 |              |         | $ | 185,281 |       
|                                     |                                                            |                               |         |                |         |             |         |              |         |   |         |       

Note: The amounts were derived from the audited financial statements at that
date.

See accompanying notes

1



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##### 



Gerber Childrenswear, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income


(Unaudited)


|                                             |                               |                              |        |                                       |        |           |        |    |        |  
|-------------------------------------------- | ----------------------------- | ---------------------------- | ------ | ------------------------------------- | ------ | --------- | ------ | -- | ------ | -
|                                             |                               |                              |        | For the quarter ended                
|                                             |                               |                              |        |                                      
|                                             |                               |                              |        | March 30,                             |        | March 31,
|                                             |                               |                              |        | 2002                                  |        | 2001     
|                                             |                               |                              |        |                                       |        |          
|                                             |                               |                              |        | (In thousands, except per share data)
|Net sales                                    |                               | $                            | 50,996 |                                       |        | $         | 54,245 |   
|Cost of sales                                |                               |                              | 37,534 |                                       |        |           | 40,046 |   
|                                             |                               |                              |        |                                       |        |           |        |   
|                                             |                               | Gross margin                 |        |                                       | 13,462 |           |        |    | 14,199 |  
|Selling, general and administrative expenses |                               |                              | 7,822  |                                       |        |           | 9,218  |   
|Other, net                                   |                               |                              |       |                                       |        |           | (1,794 | ) 
|                                             |                               |                              |        |                                       |        |           |        |   
|                                             |                               |                              | 7,822  |                                       |        |           | 7,424  |   
|                                             |                               |                              |        |                                       |        |           |        |   
|Income before interest and income taxes      |                               |                              | 5,640  |                                       |        |           | 6,775  |   
|Interest expense, net of interest income     |                               |                              | (22    | )                                     |        |           | (289   | ) 
|                                             |                               |                              |        |                                       |        |           |        |   
|Income before income taxes                   |                               |                              | 5,662  |                                       |        |           | 7,064  |   
|Provision for income taxes                   |                               |                              | 2,018  |                                       |        |           | 2,374  |   
|                                             |                               |                              |        |                                       |        |           |        |   
|Net income                                   |                               |                              | 3,644  |                                       |        |           | 4,690  |   
|                                             |                               | Foreign currency translation |        |                                       | (373   | )         |        |    | (1,270 | )
|                                             |                               |                              |        |                                       |        |           |        |   
|Comprehensive income                         |                               | $                            | 3,271  |                                       |        | $         | 3,420  |   
|                                             |                               |                              |        |                                       |        |           |        |   
|Earnings per common share                    |                               | $                            | .18    |                                       |        | $         | .24    |   
|Earnings per common share  diluted          |                               | $                            | .18    |                                       |        | $         | .24    |   
|                                             |                               |                              |        |                                       |        |           |        |   
|Denominator                                  |                               |                              |        |                                       |        |           |        |   
|Weighted average shares  basic              |                               |                              | 19,814 |                                       |        |           | 19,856 |   
|Effect of dilutive securities:               |                               |                              |        |                                       |        |           |        |   
|                                             | Nonvested stock/stock options |                              |        | 16                                    |        |           |        | 28 |       
|                                             |                               |                              |        |                                       |        |           |        |   
|Adjusted weighted average shares  diluted   |                               |                              | 19,830 |                                       |        |           | 19,884 |   
|                                             |                               |                              |        |                                       |        |           |        |   

See accompanying notes

2



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##### 



Gerber Childrenswear, Inc.

Condensed Consolidated Statements Of Cash Flows


(Unaudited)


|                                                     |                                                                                   |                                   |                                   |        |                       |        |           |        |       |        |  
|---------------------------------------------------- | --------------------------------------------------------------------------------- | --------------------------------- | --------------------------------- | ------ | --------------------- | ------ | --------- | ------ | ----- | ------ | -
|                                                     |                                                                                   |                                   |                                   |        | For the quarter ended
|                                                     |                                                                                   |                                   |                                   |        |                      
|                                                     |                                                                                   |                                   |                                   |        | March 30,             |        | March 31,
|                                                     |                                                                                   |                                   |                                   |        | 2002                  |        | 2001     
|                                                     |                                                                                   |                                   |                                   |        |                       |        |          
|                                                     |                                                                                   |                                   |                                   |        | (In thousands)       
|Operating Activities                                 |                                                                                   |                                   |                                   |        |                       |        |           |       
|                                                     | Net income                                                                        |                                   | $                                 | 3,644  |                       |        | $         | 4,690  |      
|                                                     | Adjustments to reconcile net income to net cash
provided by operating activities: |                                   |                                   |        |                       |        |           |        |      
|                                                     |                                                                                   | Depreciation and amortization     |                                   |        | 1,717                 |        |           |        | 1,547 |       
|                                                     |                                                                                   | Other                             |                                   |        | 86                    |        |           |        | 329   |       
|                                                     |                                                                                   | Changes in assets and liabilities |                                   |        |                       |        |           |        |       |       
|                                                     |                                                                                   |                                   | Accounts receivable, net          |        |                       | (6,822 | )         |        |       | 3,405  |  
|                                                     |                                                                                   |                                   | Inventories                       |        |                       | 2,667  |           |        |       | 3,113  |  
|                                                     |                                                                                   |                                   | Accounts payable                  |        |                       | (1,697 | )         |        |       | (2,162 | )
|                                                     |                                                                                   |                                   | Other assets and liabilities, net |        |                       | 1,596  |           |        |       | (1,459 | )
|                                                     |                                                                                   |                                   |                                   |        |                       |        |           |        |      
|                                                     |                                                                                   |                                   | 1,191                             |        |                       |        | 9,463     |       
|                                                     |                                                                                   |                                   |                                   |        |                       |        |           |        |      
|Investing Activities                                 |                                                                                   |                                   |                                   |        |                       |        |           |       
|                                                     | Purchases of property, plant and equipment                                        |                                   |                                   | (261   | )                     |        |           | (1,728 | )    
|                                                     | Proceeds from sale of property, plant and equipment                               |                                   |                                   | 554    |                       |        |           | 7      |      
|                                                     |                                                                                   |                                   |                                   |        |                       |        |           |        |      
|                                                     |                                                                                   |                                   | 293                               |        |                       |        | (1,721    | )     
|                                                     |                                                                                   |                                   |                                   |        |                       |        |           |        |      
|Financing Activities                                 |                                                                                   |                                   |                                   |        |                       |        |           |       
|                                                     | Principal payments on long-term borrowings and
capital leases                     |                                   |                                   | (3,917 | )                     |        |           | (3,879 | )    
|                                                     | Repurchase of common stock                                                        |                                   |                                   | (146   | )                     |        |           | (45    | )    
|                                                     |                                                                                   |                                   |                                   |        |                       |        |           |        |      
|                                                     |                                                                                   |                                   | (4,063                            | )      |                       |        | (3,924    | )     
|                                                     |                                                                                   |                                   |                                   |        |                       |        |           |        |      
|                                                     | Effect of exchange rate changes on cash                                           |                                   |                                   | (29    | )                     |        |           | (72    | )    
|                                                     |                                                                                   |                                   |                                   |        |                       |        |           |        |      
|Net (decrease) increase in cash and cash equivalents |                                                                                   |                                   | (2,608                            | )      |                       |        | 3,746     |       
|Cash and cash equivalents at beginning of period     |                                                                                   |                                   | 45,556                            |        |                       |        | 31,203    |       
|                                                     |                                                                                   |                                   |                                   |        |                       |        |           |        |      
|Cash and cash equivalents at end of period           |                                                                                   | $                                 | 42,948                            |        |                       | $      | 34,949    |       
|                                                     |                                                                                   |                                   |                                   |        |                       |        |           |        |      

See accompanying notes

3



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##### 



Gerber Childrenswear, Inc.

Notes to Condensed Consolidated Financial Statements


(Unaudited)


1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated financial statements included herein have been
prepared by Gerber Childrenswear, Inc. (the Company) pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States
have been condensed or omitted pursuant to such rules and regulations; however,
the Company believes that the disclosures are adequate to make the information
presented not misleading. The interim financial statements are unaudited and,
in the opinion of management, contain all adjustments, which are normal and
recurring in nature, necessary to present fairly the Companys financial
position and the results of its operations and cash flows for the interim
periods presented. It is suggested that these interim financial statements be
read in conjunction with the Companys audited consolidated financial
statements and notes thereto included in the Companys 2001 Annual Report on
Form 10-K.

2.     CONSOLIDATED FINANCIAL STATEMENTS

The accompanying condensed consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. The financial
statements of all foreign subsidiaries were prepared in their respective local
currencies and translated into United States dollars based on the current
exchange rate at the end of the period for the balance sheet and a weighted
average rate for the periods on the statements of income. All significant
intercompany balances have been eliminated in consolidation.

3.     SEASONALITY OF BUSINESS

The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for a full fiscal year,
due to the seasonal nature of some of the Companys products and retailer
initiated promotions.

4.     USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

4



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##### 



Gerber Childrenswear, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)

5.     INVENTORIES

Inventories consist of the following (in thousands):

|                |  |                |        |                |  |                   |        |  |  |   |        | 
|--------------- |  | -------------- | ------ | -------------- |  | ----------------- | ------ |  |  | - | ------ | 
|                |  | March 30, 2002 |        | March 31, 2001 |  | December 31, 2001
|                |  |                |        |                |  |                  
|Raw materials   |  | $              | 4,370  |                |  | $                 | 8,521  |  |  | $ | 5,547  | 
|Work in process |  |                | 4,361  |                |  |                   | 8,224  |  |  |   | 4,155  | 
|Finished goods  |  |                | 39,158 |                |  |                   | 36,882 |  |  |   | 40,923 | 
|                |  |                |        |                |  |                   |        |  |  |   |        | 
|                |  | $              | 47,889 |                |  | $                 | 53,627 |  |  | $ | 50,625 | 
|                |  |                |        |                |  |                   |        |  |  |   |        | 

6.     INCOME TAXES

The Companys effective income tax rate was 35.6% and 33.6% for the
quarters ended March 30, 2002 and March 31, 2001, respectively. The rates were
lower than the United States combined federal and state statutory rates in 2002
and 2001 due to the impact of foreign earnings, certain of which are taxed at
lower rates than in the United States, partially offset by goodwill
amortization in 2001, most of which is not deductible for federal and state
income tax purposes.

7.     RECLASSIFICATIONS

Certain amounts in 2001 have been reclassified to conform to current
presentations.

8.     BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

The Company operates in two business segments: apparel and hosiery. The
apparel segment consists of the production and sale of infant and toddler
sleepwear, underwear, bedding, bath, cloth diapers and other products primarily
to mass merchandise outlets in the U.S. under the Gerber brand, Baby Looney
Tunes brand and other labels. The hosiery segment consists of the production
and sale of sport socks under the Wilson, Coca-Cola and Converse names to major
retailers in the United States and/or Europe.

5



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##### 



Gerber Childrenswear, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)

8.     BUSINESS SEGMENTS AND GEOGRAPHIC AREAS (CONTINUED)

Net sales, income before interest and income taxes, depreciation and
amortization, and capital additions are reported based on the operations of
each business segment or geographic region. Assets are those used exclusively
in the operations of each business segment or geographic region, or which are
allocated when used jointly. The following table sets forth certain unaudited
results of operations and other financial information of the Company by
business segment and geographic region (in thousands):

Business Segments

|                                              |         |   |                       |        |           |   |        |        | 
|--------------------------------------------- | ------- | - | --------------------- | ------ | --------- | - | ------ | ------ | 
|                                              |         |   | For the quarter ended
|                                              |         |   |                      
|                                              |         |   | March 30,             |        | March 31,
|                                              |         |   | 2002                  |        | 2001     
|                                              |         |   |                       |        |          
|Net sales:                                    |         |   |                       |        |           |   |        |       
|                                              | Apparel |   | $                     | 36,577 |           |   | $      | 38,363 | 
|                                              | Hosiery |   |                       | 14,419 |           |   |        | 15,882 | 
|                                              |         |   |                       |        |           |   |        |        | 
|Total net sales                               |         | $ | 50,996                |        |           | $ | 54,245 |       
|                                              |         |   |                       |        |           |   |        |        | 
|Income before interest and income taxes:      |         |   |                       |        |           |   |        |       
|                                              | Apparel |   | $                     | 5,674  |           |   | $      | 6,065  | 
|                                              | Hosiery |   |                       | (34    | )         |   |        | 710    | 
|                                              |         |   |                       |        |           |   |        |        | 
|Total income before interest and income
taxes |         | $ | 5,640                 |        |           | $ | 6,775  |       
|                                              |         |   |                       |        |           |   |        |        | 
|Depreciation and amortization:                |         |   |                       |        |           |   |        |       
|                                              | Apparel |   | $                     | 1,100  |           |   | $      | 680    | 
|                                              | Hosiery |   |                       | 617    |           |   |        | 867    | 
|                                              |         |   |                       |        |           |   |        |        | 
|Total depreciation and amortization           |         | $ | 1,717                 |        |           | $ | 1,547  |       
|                                              |         |   |                       |        |           |   |        |        | 
|Capital additions:                            |         |   |                       |        |           |   |        |       
|                                              | Apparel |   | $                     | 229    |           |   | $      | 886    | 
|                                              | Hosiery |   |                       | 32     |           |   |        | 842    | 
|                                              |         |   |                       |        |           |   |        |        | 
|Total capital additions                       |         | $ | 261                   |        |           | $ | 1,728  |       
|                                              |         |   |                       |        |           |   |        |        | 

|                                       |         |   |           |         |           |   |              |         |  |   |         |         | 
|-------------------------------------- | ------- | - | --------- | ------- | --------- | - | ------------ | ------- |  | - | ------- | ------- | 
|                                       |         |   | March 30, |         | March 31, |   | December 31,
|                                       |         |   | 2002      |         | 2001      |   | 2001        
|                                       |         |   |           |         |           |   |             
|Assets:                                |         |   |           |         |           |   |              |         |  |   |         |        
|                                       | Apparel |   | $         | 134,404 |           |   | $            | 135,922 |  |   | $       | 135,828 | 
|                                       | Hosiery |   |           | 49,587  |           |   |              | 51,271  |  |   |         | 49,453  | 
|                                       |         |   |           |         |           |   |              |         |  |   |         |         | 
|Total assets                           |         | $ | 183,991   |         |           | $ | 187,193      |         |  | $ | 185,281 |        
|                                       |         |   |           |         |           |   |              |         |  |   |         |         | 
|Inventories (included in assets):      |         |   |           |         |           |   |              |         |  |   |         |        
|                                       | Apparel |   | $         | 38,061  |           |   | $            | 43,336  |  |   | $       | 41,208  | 
|                                       | Hosiery |   |           | 9,828   |           |   |              | 10,291  |  |   |         | 9,417   | 
|                                       |         |   |           |         |           |   |              |         |  |   |         |         | 
|Total inventories (included in assets) |         | $ | 47,889    |         |           | $ | 53,627       |         |  | $ | 50,625  |        
|                                       |         |   |           |         |           |   |              |         |  |   |         |         | 

6



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##### 



Gerber Childrenswear, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)

8.     BUSINESS SEGMENTS AND GEOGRAPHIC AREAS (CONTINUED)

Geographic Areas

|                                              |               |   |                       |        |           |   |        |        | 
|--------------------------------------------- | ------------- | - | --------------------- | ------ | --------- | - | ------ | ------ | 
|                                              |               |   | For the quarter ended
|                                              |               |   |                      
|                                              |               |   | March 30,             |        | March 31,
|                                              |               |   | 2002                  |        | 2001     
|                                              |               |   |                       |        |          
|Net sales:                                    |               |   |                       |        |           |   |        |       
|                                              | United States |   | $                     | 46,776 |           |   | $      | 49,033 | 
|                                              | All other     |   |                       | 4,220  |           |   |        | 5,212  | 
|                                              |               |   |                       |        |           |   |        |        | 
|Total net sales                               |               | $ | 50,996                |        |           | $ | 54,245 |       
|                                              |               |   |                       |        |           |   |        |        | 
|Income before interest and income taxes:      |               |   |                       |        |           |   |        |       
|                                              | United States |   | $                     | 5,379  |           |   | $      | 6,016  | 
|                                              | All other     |   |                       | 261    |           |   |        | 759    | 
|                                              |               |   |                       |        |           |   |        |        | 
|Total income before interest and income
taxes |               | $ | 5,640                 |        |           | $ | 6,775  |       
|                                              |               |   |                       |        |           |   |        |        | 

|             |               |   |           |         |           |   |              |         |  |   |         |         | 
|------------ | ------------- | - | --------- | ------- | --------- | - | ------------ | ------- |  | - | ------- | ------- | 
|             |               |   | March 30, |         | March 31, |   | December 31,
|             |               |   | 2002      |         | 2001      |   | 2001        
|             |               |   |           |         |           |   |             
|Assets:      |               |   |           |         |           |   |              |         |  |   |         |        
|             | United States |   | $         | 159,846 |           |   | $            | 163,629 |  |   | $       | 160,786 | 
|             | All other     |   |           | 24,145  |           |   |              | 23,564  |  |   |         | 24,495  | 
|             |               |   |           |         |           |   |              |         |  |   |         |         | 
|Total assets |               | $ | 183,991   |         |           | $ | 187,193      |         |  | $ | 185,281 |        
|             |               |   |           |         |           |   |              |         |  |   |         |         | 

9.     RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 142 Goodwill and Other Intangible Assets (SFAS
142). SFAS 142 supersedes Accounting Principles Bulletin No. 17, Intangible
Assets. SFAS 142 primarily addresses the accounting for goodwill and
intangible assets subsequent to their acquisition. The most significant
changes made by SFAS 142 are: (a) goodwill and indefinite lived intangible
assets will no longer be amortized, (b) goodwill will be tested for impairment
at least annually, (c) intangible assets deemed to have an indefinite life will
be tested for impairment at least annually and (d) the amortization period of
intangible assets with finite lives will no longer be limited to forty years.
The Company adopted SFAS 142 on January 1, 2002. As of March 30, 2002, the
Company has not completed the first transitional goodwill impairment test using
the methodology prescribed by SFAS 142, and thus has not yet determined the
effect, if any, on its consolidated financial position, results of operations
and cash flows.

7



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##### 



Gerber Childrenswear, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)

9.     RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

As required by SFAS 142, the results for the periods prior to its adoption
have not been restated. The following table reconciles the reported net income
to that which would have resulted for the quarter ended March 31, 2001 if SFAS
142 had been adopted as of December 31, 2000 (in thousands):

|                                       |  |                       |       | 
|-------------------------------------- |  | --------------------- | ----- | 
|                                       |  | For the Quarter Ended
|                                       |  | March 31, 2001       
|                                       |  |                      
|Net income                             |  | $                     | 4,690 | 
|Goodwill amortization                  |  |                       | 262   | 
|                                       |  |                       |       | 
|Pro forma net income                   |  | $                     | 4,952 | 
|                                       |  |                       |       | 
|Earnings per share  basic and diluted |  | $                     | .25   | 
|                                       |  |                       |       | 

The Financial Accounting Standards Board also recently issued Statement
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets
(SFAS 144). SFAS 144 establishes accounting standards for the recognition
and measurement of long-lived assets held for use or held for disposal. The
Company adopted the standard effective January 1, 2002, and the adoption did
not have a material impact on the condensed consolidated financial statements.

10.     CURTAILMENT GAIN ON POSTRETIREMENT PLAN

In January 2001, the Company decided to change eligibility requirements of
the postretirement medical benefit plan (the Postretirement Plan) resulting
in a $1.8 million gain on curtailment of postretirement benefit costs for the
quarter ended March 31, 2001.

8



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##### 



ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SAFE-HARBOR STATEMENT REGARDING FORWARD-LOOKING DISCLOSURE

This report includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, which represent
the Companys expectations or beliefs concerning future events that involve
known and unknown risks and uncertainties, including, without limitation, those
associated with the effect of national, regional and foreign economic
conditions (including foreign exchange rates), the overall level of consumer
spending, the performance of the Companys products within the prevailing
retail environment, customer acceptance of both new designs and
newly-introduced product lines, competition and financial difficulties
encountered by customers. All statements other than statements of historical
facts included in this quarterly report, including, without limitation, the
statements under Managements Discussion and Analysis of Financial Condition
and Results of Operations, are forward-looking statements. Although the
Company believes that the expectations reflected in such forward-looking
statement are reasonable, it can give no assurance that such expectations will
prove to have been correct and actual results, performance or events could
differ materially from those expressed in such statements.

ENVIRONMENTAL COMPLIANCE

The Companys manufacturing facilities and operations are subject to
certain federal, state, local and foreign laws and regulations relating to
environmental protection and occupational health and safety, including those
governing wastewater discharges, air emissions, the management and disposal of
solid and hazardous wastes, and the remediation of contamination associated
with the release of hazardous substances. Prior to its acquisition by the
Company, Auburn Hosiery Mills, Inc. (Auburn) was cited for discharging
contaminants into the sewer system from its facility in Auburn, Kentucky in
excess of the amounts allowed under its permits. The city has been working
with Auburn to remedy the problem, and among other remediation activities, the
Company purchased additional wastewater pretreatment equipment in 2001.

The wastewater discharge permit issued by the State of Kentucky, which
Auburn has been operating under, was extended to June 1, 2002. This permit
contains a compliance schedule which outlines the time period during which
Auburn must be in compliance with all parameters contained in the permit. The
limits of the extended permit are identical to the permit which expired on
March 31, 2002, with the exception of the compliance schedule, and Auburn may
seek an additional extension of the ammonia limits as it tests other
alternatives which produce less ammonia.

9



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##### 



SIGNIFICANT ACCOUNTING POLICIES

In response to the SECs Release numbers 33-8040 Cautionary Advice
Regarding Disclosure About Critical Accounting Policies and 33-8056,
Commission Statement about Managements Discussion and Analysis of Financial
Condition and Results of Operations, the Company in its 2001 Annual Report on
Form 10-K identified the critical accounting policies that affected the more
significant judgments and estimates that were used in the preparation of the
consolidated financial statements at December 31, 2001. The Company has
reviewed the significant accounting policies used at December 31, 2001 and at
March 30, 2002 and have noted no significant changes. It is suggested that the
Form 10-Q be read in conjunction with the Companys 2001 Annual Report on Form
10-K.

RESULTS OF OPERATIONS

Business Segment Data

For information regarding net sales, income before interest and income
taxes and assets by industry segment, reference is made to the information
presented in Note 8 Business Segments and Geographic Areas to the condensed
consolidated financial statements.

First Quarter Ended March 30, 2002 Compared to First Quarter Ended March 31, 2001

Net sales.Apparel net sales were $36.6 million for the first quarter of
2002, a decrease of $1.8 million or 4.7% below net sales of $38.4 million for
the first quarter of 2001. The Apparel sales decline was primarily due to
lower sales in 2002 of character licensing merchandise, reflecting the trend of
lower per capita spending on such merchandise in both the United States and
Canada. Hosiery net sales were $14.4 million in the first quarter of 2002, a
decrease of $1.5 million or 9.2% below net sales of $15.9 million for the first
quarter of 2001. The Hosiery sales decline was primarily due to reduced
volumes, largely reflecting the continuing weakness in the European markets,
plus aggressive promotional pricing in Europe.

Gross margin.Gross margin as a percentage of net sales increased from
26.2% in 2001 to 26.4% in 2002. The slight increase in gross margin in 2002
resulted from improved margins on Apparel products offsetting Hosiery margins
that were 250 basis points lower than last year due to lower volumes and
promotional pricing.

Selling, general & administrative expenses.Selling, general and
administrative expenses (SG&A) decreased as a percentage of net sales to
15.3% in the first quarter of 2002, from 17.0% in 2001. The percentage
decrease includes a 1.1% reduction in 2002 due to the elimination of the
Companys postretirement medical benefit plan (Postretirement Plan  see
Other below for related curtailment gains) with the remaining improvements
resulting from efficiencies achieved in the Apparel operations.

Other.Represents a gain on curtailment of postretirement benefit costs
associated with the Companys decision to change eligibility requirements of
the Postretirement Plan. These changes resulted in a gain on curtailment of
postretirement benefit costs of approximately $1.8 million in the first quarter
of 2001.

10



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##### 



Income before interest and income taxes.Apparel income before interest
and income taxes (EBIT) was $5.7 million in the first quarter of 2002
compared to $6.1 million in the first quarter of 2001. The decrease in Apparel
EBIT in 2002 was the result of the $1.8 million gain reported above in Other in
2001, partially offset by stronger margins and lower SG&A expenses in 2002.
Hosiery EBIT was a loss of $34,000 in the first quarter of 2002 compared with
income of $0.7 million in the first quarter of 2001. The decrease in Hosiery
EBIT was the result of both lower sales volumes and lower gross margins on
actual sales due to the lower volumes and promotional pricing in the European
markets.

Interest expense, net of interest income.The Company had net interest
income of $22,000 in the first quarter of 2002 compared to net interest income
of $289,000 in the first quarter of 2001. The change in interest income is due
to lower rates of return on the Companys invested cash in 2002, partially
offset by higher cash balances and the capitalization of interest expense
related to the Companys new enterprise resource planning and warehouse
management system in 2001.

Provision for income taxes.Provision for income taxes was $2.0 million
in the first quarter of 2002 compared to $2.4 million in the first quarter of
2001. The effective tax rate was 35.6% for 2002 compared to 33.6% for 2001.
The 2002 rate was higher due to reduced foreign earnings that are typically
taxed at lower rates than in the United States.

Net income.As a result of the above, net income for the first quarter
was $3.6 million in 2002 compared to $4.7 million in 2001.

LIQUIDITY AND CAPITAL RESOURCES

The Companys primary cash needs are for working capital, capital
expenditures and debt service. The Company has financed its cash needs
primarily through internally generated cash flow. For the Apparel segment,
working capital requirements vary throughout the year. Working capital
requirements have historically increased during the first half of the year as
inventory builds to support peak shipping periods. The Hosiery segment is less
seasonal and, while working capital requirements tend to increase slightly
during the second half of the year, the variation is small.

Net cash provided by operating activities for the three months ended March
30, 2002 and March 31, 2001 was $1.2 million and $9.5 million, respectively.
The decrease in cash provided by operating activities in the first three months
of 2002 compared to 2001 was primarily due to an increase in the Companys
accounts receivable. Accounts receivable increased due to (a) a low accounts
receivable balance at December 31, 2001 that was the result of lower fourth
quarter 2001 sales, (b) net outstanding accounts receivable balances from Kmart
for shipments made prior to its filing for bankruptcy and (c) the timing of
sales and collections for the first quarter of 2002.

Capital expenditures were $0.3 million and $1.7 million for the first
three months of 2002 and 2001, respectively. The higher expenditures in 2001
were primarily due to upgrades of information systems. The Company sold its
Lumberton Sew facility in March 2002 for approximately $0.5 million.

11



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##### 



Net cash used in financing activities was $4.1 million and $3.9 million
for the first three months of 2002 and 2001, respectively. The cash used in
financing activities primarily consisted of repayments on the Companys credit
agreement and/or other long-term borrowing arrangements. The Company in
January 2002 elected to pay off the remaining balance on the term loan of
approximately $3.7 million. The Company in March 2001 made a mandatory excess
cash flow payment, based on excess annual cash flow as defined in the credit
agreement, of approximately $2.1 million.

The Company believes that cash on hand, combined with cash generated from
operations and amounts available under its credit facilities, will be adequate
to meet its working capital, capital expenditures and debt service requirements
for the next twelve months.

INFLATION

In general, costs are affected by inflation and the Company may experience
the effects of inflation in future periods. The Company does not currently
consider the impact of inflation to be significant in the businesses or
countries in which the Company operates.

RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 142 Goodwill and Other Intangible Assets (SFAS
142). SFAS 142 supersedes Accounting Principles Bulletin No. 17, Intangible
Assets. SFAS 142 primarily addresses the accounting for goodwill and
intangible assets subsequent to their acquisition. The most significant
changes made by SFAS 142 are: (a) goodwill and indefinite lived intangible
assets will no longer be amortized, (b) goodwill will be tested for impairment
at least annually, (c) intangible assets deemed to have an indefinite life will
be tested for impairment at least annually and (d) the amortization period of
intangible assets with finite lives will no longer be limited to forty years.
The Company adopted SFAS 142 on January 1, 2002. As of March 30, 2002, the
Company has not completed the first transitional goodwill impairment test using
the methodology prescribed by SFAS 142, and thus has not yet determined the
effect, if any, on its consolidated financial position, results of operations
and cash flows.

As required by SFAS 142, the results for the periods prior to its adoption
have not been restated. The following table reconciles the reported net income
to that which would have resulted for the quarter ended March 31, 2001 if SFAS
142 had been adopted as of December 31, 2000 (in thousands):

|                                       |  |                       |       | 
|-------------------------------------- |  | --------------------- | ----- | 
|                                       |  | For the Quarter Ended
|                                       |  | March 31, 2001       
|                                       |  |                      
|Net income                             |  | $                     | 4,690 | 
|Goodwill amortization                  |  |                       | 262   | 
|                                       |  |                       |       | 
|Pro forma net income                   |  | $                     | 4,952 | 
|                                       |  |                       |       | 
|Earnings per share  basic and diluted |  | $                     | .25   | 
|                                       |  |                       |       | 

12



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##### 



The Financial Accounting Standards Board also recently issued Statement
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets
(SFAS 144). SFAS 144 establishes accounting standards for the recognition
and measurement of long-lived assets held for use or held for disposal. The
Company adopted the standard effective January 1, 2002, and the adoption did
not have a material impact on the condensed consolidated financial statements.

ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company does not utilize derivative financial or commodity based
instruments for trading or for speculative purposes but does utilize them in
the regular course of business. A review of the Companys financial
instruments and risk exposures at March 30, 2002 revealed that the Company had
exposure to interest rate and foreign currency exchange rate risks. The
Company performed sensitivity analysis at December 31, 2001 to assess the
potential effect of a change in the interest rate and a change to the foreign
currency exchange rates and concluded that near-term changes in either should
not materially affect the Companys financial position, results of operations
or cash flows. The Company has experienced no significant changes in these
financial instruments or risk exposures during the first three months of 2002
and thus believes that the Companys year-end assessment is still appropriate
at March 30, 2002.

PART II  OTHER INFORMATION

ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits   None

(b)  Reports on Form 8-K    None

13



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##### 



SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

|                  |  |                                     
|----------------- |  | ------------------------------------
|                  |  | Gerber Childrenswear, Inc.          
|                  |  | (Registrant)                        
|                  |  |                                     
|                  |  |                                     
|DATE: May 9, 2002 |  | By: /s/ Edward Kittredge            
|                  |  |                                     
|                  |  | Edward Kittredge                    
|                  |  | Chairman, Chief Executive Officer   
|                  |  | and President                       
|                  |  | (Principal Executive Officer)       
|                  |  |                                     
|                  |  |                                     
|                  |  |                                     
|DATE: May 9, 2002 |  | By: /s/ Richard L. Solar            
|                  |  |                                     
|                  |  | Richard L. Solar                    
|                  |  | Senior Vice President and Chief     
|                  |  | Financial Officer                   
|                  |  | (Principal Financial Officer)       
|                  |  |                                     
|                  |  |                                     
|                  |  |                                     
|DATE: May 9, 2002 |  | By: /s/ David E. Uren               
|                  |  |                                     
|                  |  | David E. Uren                       
|                  |  | Vice President of Finance, Secretary
|                  |  | and Treasurer                       
|                  |  | (Principal Accounting Officer)      

14